California is home to the largest cannabis market in the United States, yet the growing side of the industry remains non-compliant. The problem is not only with the enormous illicit trade, but also with the state’s “provisional” licensing program, which lawmakers created as a stopgap measure to give growers time to transition to permanent annual licenses.
As of March 4, 2021, a staggering 83 percent of marijuana business licenses in California were provisional permits; only 17 percent were annual licenses.
The permanent annual license application process is far more stringent than the provisional license, requiring prospective licensees to submit to background checks; provide surety bonds, detailed waste-management plans, security and pesticide protocols; and comply with State Water Resources Control Board, California Department of Fish and Wildlife (CDFW), and Department of Pesticide Regulation requirements. In addition, licensees must comply with all county and local regulations, including land-use ordinances. Depending on a farm’s location and cultivation practices, growers also may be required to obtain road-development permits, water-diversion permits, wastewater discharge permits, and CDFW lake and streambed alteration agreements, as well as demonstrate compliance with the stringent California Environmental Quality Act (CEQA).
Clearly, complying with the requirements can be challenging and costly. The CEQA regulations, in particular, can create large burdens on growers.
All the provisional licenses expire this year. In an attempt to remedy that situation, Senator Anna Calallero introduced California State Senate Bill 59, which offers to extend provisional licenses for growers who do not comply with CEQA if the applicant demonstrates “evidence compliance is underway.” Most significantly, the bill extends the deadline for compliance all the way out to 2028, essentially giving growers a total of ten years to comply with the environmental regulations.
Why is this important?
Permanent license holders say extending the CEQA-compliance deadline for provisional license holders is patently unfair to those who invested significant resources to create complaint operations. But even more importantly, the bill enables potentially serious consequences for the environment by allowing provisional cannabis farms to delay compliance with laws intended to protect waterways, soil, and air.
Environmental groups objected the last time provisional licenses were extended and are expected to oppose SB 59 because they do not want the proposed delays to develop, eventually, into an outright exemption.
The environmental impact in California is worse than in other states. Cannabis production in the state causes significant and problematic issues, according to a research report published in peer-reviewed journal BioScience.“Marijuana production in California is centered in sensitive watersheds with high biodiversity,” the report stated. “The combination of limited water resources, a water-hungry crop, and cultivation in sensitive ecosystems means marijuana cultivation can have environmental impacts that are disproportionately large given the area under production.”
Not surprisingly, there is heated debate about this issue. Amy Jenkins, lead lobbyist for the California Cannabis Industry Association, said the group is in favor SB 59 despite that environmentalists have “considerable concerns” most of the marijuana industry has not complied with environmental protection laws.
Cannabis growers have failed to implement environmentally safe production methods for decades, according to a lengthy report about environmental sustainability published by the National Cannabis Industry Association. “Whether this was the result of a lack of education, efforts for concealment, or a lack of access to mainstream agricultural and waste-management resources,” the environmental damage has been significant, the report states. The report urges government officials to “create workable standards with supporting resources to set the cannabis industry apart as a leader in environmental sustainability.”
Unfortunately, that’s a pretty far cry from today’s reality.
Although there are profound arguments on both sides of the issue, SB 59 is a poorly written piece of legislation that simply kicks the can down the road for another six years, potentially leading to untold environmental damage for decades to come.
We can and must do better.
Randall Huft is president and creative director at Innovation Agency, an advertising, branding, and public relations firm specializing in the cannabis industry. While working with blue-chip companies including AT&T, United Airlines, IBM, Walgreens, American Express, Toyota, and Disney, he discovered what works, what doesn’t, and how to gain market share.